What Is a POS Decline Fee?

by Cam Merritt
Your bank may charge you a fee if your debit card purchase is rejected.

Banks charge a POS decline fee or denial fee when a customer tries to use a debit card to buy something but the bank refuses to let them. POS, or point of sale, terminals are electronic devices at store checkout areas that read debit and credit cards to submit a sale for approval or rejection.

Why They Happen

Most commonly, a bank will decline a POS transaction because the account linked to the debit card doesn't have enough money in it to cover the purchase. If the account limits the number of debit card purchases you can make and you've reached your limit, the bank might fine you for your error.

Legal Tender

Not all banks charge POS decline fees. Under federal regulations, a bank can charge them as long as it notifies customers it will do so. Banks usually do this by including it in their basic card agreement, the document that spells out the rules for using the bank's debit card.

About the Author

Cam Merritt is a writer and editor specializing in business, personal finance and home design. He has contributed to USA Today, The Des Moines Register and Better Homes and Gardens"publications. Merritt has a journalism degree from Drake University and is pursuing an MBA from the University of Iowa.

Photo Credits

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